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The Killing of Alydar

Once upon a time he was one of the fastest thoroughbreds in the world. In 1990 he was put down after breaking his leg—an accident, it was assumed, until last year.

by Skip Hollandsworth

 

He was a beautiful, proud thoroughbred, headstrong and demanding, the kind of horse who would snort impatiently if he decided the grooms were not paying him enough attention. Each day, his oak- paneled stall was swept, mopped, and replenished with fresh straw. His richly colored chestnut coat was constantly brushed. For his daily exercise sessions, he was taken to his own three-acre paddock, where he could frolic alone in perfectly tended bluegrass.His name was Alydar. To sports fans, he was known for the thrilling duels he staged with his rival, Affirmed, for the 1978 Triple Crown. But to the world's wealthiest horse breeders, he was revered for a different reason altogether. Alydar was one of the greatest sires in Thoroughbred history—a 1,200-pound genetic wonder whose offspring often became champion racehorses themselves. Each spring, the breeders would come with their convoys of horse trailers to Kentucky's Calumet Farm, one of the country's premier horse-racing operations, willing to pay hundreds of thousands of dollars to have Alydar mount their finest mares. Day after day, more than two hundred times a year, he would strut into the breeding shed, eye his latest prize, rise up on his hind legs, and begin to dance forward. Within seconds, his tail would swoosh up, signaling the end of his encounter, and he would be washed and then led away, back to the stall with his name emblazoned on the brass doorplate.

But on a chilly November night in 1990, the great stallion was found in shock in his stall, his coat glistening with sweat, his right hind leg hanging by tendons, a shaft of white bone jutting through his skin. J. T. Lundy, the rotund, blustery head of the farm, told veterinarians that Alydar had shattered his leg by kicking his own stall door. He had kicked it so hard, Lundy said, that he had knocked loose a heavy metal roller that had been bolted into the floor just outside Alydar's sliding door.

In emergency surgery, veterinarians were able to set the bone and put a cast on his leg. But within 24 hours, Alydar, hearing the whinnying of some mares in a nearby pasture, turned to look out a window in the Calumet clinic, put too much weight on the leg, and this time broke his femur. The sound of the break was like a gunshot. As he lay on the floor, an uncomprehending look in his eyes, Alydar was put down, and his body was taken to the Calumet cemetery, where he was buried with the farm's other racing champions. Eight months later, Calumet itself unraveled, forced to declare bankruptcy with more than $127 million in debts. According to the stories splashed on the sports pages of almost every newspaper in the country, the farm could not begin to pay its immense bills and bank loans without the millions of dollars it had been deriving from Alydar's stud fees. Calumet was so broke that its horses and equipment were going to be sold at public auction.

It was difficult for Kentucky horse people to believe that such a calamity could have happened. A few of them quietly said they were haunted by the strange circumstances of Alydar's death. A foreman from the stallion barn, for instance, couldn't remember Alydar having ever kicked anything hard enough to do any damage to his leg. And it was difficult to understand how even a powerful horse could have kicked that solid oak door with enough force to knock it off its hinges. Yet there was never an official investigation into the events of that night. No public accusations were made. As everyone in the horse business knew, horses could be unpredictable, and they could also be fragile. Alydar's death, no doubt, was one of those accidental, heartbreaking tragedies that no one could have done anything about.

And that, by all accounts, was the end of the story—until one afternoon in 1996, when a young assistant U.S. attorney in Houston was sitting in her downtown office, flipping through some bank records. The attorney's name was Julia Hyman (she now goes by her married name, Julia Tomala), and she knew nothing about horse racing. She spent her days investigating one of the worst financial scandals in American history: the widespread failure of hundreds of Texas financial institutions. Her job was to unearth the most complicated of white-collar crimes, such as money-laundering schemes and check-kiting operations.

On that particular afternoon, Tomala was studying the documents of the defunct First City National Bank of Houston, looking for evidence of fraud. She paused when she came to a document that mentioned Calumet Farm. She paused again when she came to a document that mentioned Alydar.

At the time, Tomala, an elegant woman with thick dark hair and a fondness for stylish black pantsuits, had no idea who or what Alydar was. She had never even been to a horse race. But by the summer of 1997, she was on her way to Kentucky to ask questions about how that horse had lived and died. She was accompanied by a rookie FBI agent out of the Houston office, Rob Foster, a former college baseball player who had never conducted a field investigation and who also knew nothing about horse racing.

Quickly, the word spread among the Bluegrass aristocracy that a couple of outsiders intended to pry into their private business. Tomala and Foster had been seen in Alydar's stall at Calumet, at a veterinary clinic, even at a construction site, where a former Calumet groom had gone to work as a laborer.

What, people wondered, did this prosecutor think she was going to learn about Alydar that wasn't already known? And why, after all this time, did it matter?

It would not be until October 2000, almost ten years after Alydar's death, that Tomala would finally reveal what she had been doing. At a little-publicized hearing in a nearly empty federal courtroom in Houston, she stood before a judge and said that the death of Alydar was no accidental tragedy. Alydar, she proclaimed, had been murdered.

It is a blockbuster of a story, a sweeping saga of greed, fraud, and almost unimaginable cruelty that could have been lifted straight from a best-selling Dick Francis horse-racing novel. The settings range from the raucous pageantry of the Kentucky Derby to the hushed, baronial offices of Lloyd's of London in England, and even the minor characters—from an uneducated, chain-smoking Kentucky farmhand tormented by a secret to a corrupt Texas banker living in luxury at Houston's Four Seasons Hotel—seem right out of central casting. "This story has got blood and money, scandal and intrigue, and one hell of a beautiful horse," says Allen Goodling of Houston, one of the many lawyers who became involved in the case. "What more does anybody want?"

But in the early sixties, one of Lucille's grandchildren, her own namesake, Lucille "Cindy" Wright, made a decision that would have an enormous impact on Calumet's future. She decided, at the mere age of sixteen, to marry a rambunctious good old boy who liked racing his souped-up car down the narrow two-lane roads that ran past the horse farms. J. T. Lundy, the 21-year-old son of a tenant farmer who worked a piece of land in an adjoining county, was to the Kentucky horse gentry what Jett Rink was to the Texas ranchers in the movie Giant—the classic outsider who dressed in old work clothes and usually couldn't get through a conversation without letting loose a few choice cusswords. With a head the size of a gasoline can and a nose that looked as if it had been busted and reset by a plumber, he looked like a country bumpkin. As one disgusted Kentucky blueblood would later tell Austin journalist Carol Flake, who wrote an absorbing profile of Calumet Farm in 1992 for the now- defunct Connoisseur magazine, a big night for Lundy was "sitting in front of the TV with a bucket of buffalo wings watching reruns of The Dukes of Hazzard."

Yet underneath that salt-of-the-earth personality lay a surprisingly fierce ambition. Lundy often told his friends that his dream was to run Calumet. Some of those friends even remember him boasting that he was going to marry young Cindy Wright just so he could get into Calumet's founding family. If so, he made the right choice. Those who know Cindy say she was never much of a society girl—"She didn't like those parties where people sipped mint juleps," says a Lundy relative—and that she always preferred the company of plainspoken rural boys rather than the college-bound sons of Lexington's aristocrats. To her, the down-home Lundy was ideal.

After their marriage, Lundy bought a small farm and started a breeding program to produce racehorses, perhaps to show Cindy and her family that he was serious about his desire to head Calumet. Throughout the sixties and seventies, however, the farm remained firmly in the hands of its matriarch, who by then had married a dashing retired U.S. Navy admiral named Gene Markey. Though approaching eighty, Lucille Wright Markey had not lost her resolve to produce one more Kentucky Derby winner. In 1976 she hired a brilliant young trainer, John Veitch, who began watching a horse named Alydar that had been born at Calumet the year before. At the Blue Grass Stakes in the early spring of 1978, Lucille Markey stood next to the outside rail, gripping it with her white gloves, as Alydar introduced himself to the world, sweeping around the final turn and racing victoriously to the wire. Then, at the Kentucky Derby, the Preakness, and the Belmont—the races that make up the Triple Crown—Alydar and another Kentucky Thoroughbred, Affirmed, staged what turf writers still describe as the greatest duel in horse-racing history. They literally raced side by side, eyeball to eyeball, their hooves pounding like cannon fire as they hit the home stretch. In their fight to the finish at Belmont, they ran dead even for the final seven furlongs.

To Lucille Markey's deep disappointment, it was always Affirmed who got to the wire just ahead of Alydar. Yet once the two horses were retired to their stallion barns back on the farms where they were born, it was Alydar that everyone wanted to see. In the Thoroughbred-breeding business, there is no way to tell which stallion, regardless of its own pedigree, will be able to produce a new generation of winners at the track. The business is a crapshoot, based almost purely on luck. So when Alydar's initial progeny turned out to be strong, fleet-footed foals, the word quickly spread that the most famous second-place finisher in the Triple Crown had semen as valuable as gold.

Initially Alydar's stud fee was $40,000. J. T. Lundy told his in-laws that Calumet's management team was forfeiting the chance to make millions off Alydar. His message to the heirs was clear: Calumet needed a new leader. And who better than Lundy himself? There was no question that he was a hard worker who knew how to make money in the horse business. At the time, Lundy's farm was said to be worth several million dollars.

According to a history of Calumet, Wild Ride, by Ann Hagedorn Auerbach, Lucille Markey despised the overly ambitious tenant farmer's son. She refused to let Lundy breed his horses with Calumet horses, and she even tried to keep him from visiting the farm—which only reinforced Lundy's resolve to take over her kingdom. One story that circulated through Bluegrass circles was that Lundy had taken up jogging to stay in good enough shape just to outlive her. "Here was somebody who may have felt inferior his entire life," says Gary Matthews, Calumet's former chief financial officer. "And he wanted to get to the top just to show everybody he could do it."

He got his chance on July 24, 1982, when Lucille Markey died at the age of 85. Soon afterward, the Calumet heirs announced an agreement with 41-year-old J. T. Lundy, granting him "full discretionary management powers" over the farm. The country bumpkin was now the lord of Calumet Farm.

Almost immediately, Lundy began a multimillion dollar restoration of Calumet. He had workers install iron gates across the main entrance, as if to signify to the world that a new man was in charge, and he had the farm's 23 miles of fence repainted. He ordered the construction of a state-of-the-art veterinary clinic, complete with a treadmill and an equine swimming pool, which alone cost $1 million. He added new freeze-proof water troughs and a five-eighths-mile turf track, and he bought new stallions and racehorses, all in the hope that Calumet would regain the glory of its early days.Lundy was in such a hurry to get his projects under way that in 1983 he took out a $13.2 million loan. His bankers could not possibly have been worried about Lundy's paying it back. The farm was then debt free. What's more, Lundy soon raised Alydar's stud fee to $250,000. He also did something never before heard of in the Thoroughbred business: He started selling what he called lifetime breeding rights to the stallion. For $2.5 million, an owner could send one mare to Alydar's breeding shed each year for as long as Alydar was able to breed.

Lundy's timing couldn't have been better. In the early eighties the Bluegrass world was awash in money. Multimillionaire bidders—from Saudi sheiks to Japanese industrial titans and American oil barons such as Dallas' Nelson Bunker Hunt—attended yearling auctions at Keeneland Park, waving their hands to push the prices higher and higher. And whenever a son or daughter of Alydar was led into the ring, the bidding occasionally topped $2 million—for a single, unproven young horse. In 1983 Alydar was the industry's champion first-year sire: His offspring sold for an average of $760,000 each, at that time a record for a first crop.

Horse breeders who once rolled their eyes at J. T. Lundy were now slapping him on the back—hoping that he would look favorably on them when it came time to pick the new mares who would get to visit Alydar's breeding shed. Lundy even found himself the object of adulation by a respected columnist for the industry's journal, the Blood-Horse, who wrote, "While there has been some criticism of the methods of Lundy in his direction of Calumet, it seems to be based more on envy than fact. Lundy, in my opinion, is doing a great job in rebuilding a grand heritage."But Lundy didn't just want to rebuild a heritage. He wanted to create a Thoroughbred empire unlike any other. He too joined the bidding frenzy for new horses—spending between $20 million and $30 million for a half-interest in a stallion named Secreto. He continued renovating the farm, installing a gazebo and a tennis court and a swimming pool (this one for humans). He renovated his office, adding a second-story with a balcony from which he could survey the farm. Although he still wouldn't buy nice clothes for himself—he continued to wear open-collar shirts, corduroy pants, and Top-Siders to formal events at which every other horseman was dressed in a jacket and tie—he did spend $30,000 a month of Calumet money to lease a private jet, which he didn't hesitate to use for personal trips. (He once flew a group of friends to Maine for a lobster dinner.) He bought property for himself in the Florida Keys. In one of his most perplexing ventures, he made Calumet a sponsor of the Indy race car of A. J. Foyt, one of Lundy's longtime heroes.

Suddenly, J. T. Lundy was a jet-setting wheeler-dealer, sitting in the finest boxes at the nation's finest racetracks, cutting deals with other horse farm owners for horses and breeding rights, and paying himself a reported 10 percent sales commission on every deal he made. Perhaps because Lundy's wife, Cindy, had realized that she would never be able to compete with her husband's obsession with the farm, she began spending most of her time in the Virgin Islands, Scotland, and Colorado—which apparently was just fine with Lundy. He soon had a girlfriend, a young woman he had hired to work in the main office at the farm.

To pay for his newest ventures, Lundy took out a $20 million mortgage on the farm and received another $15 million line of credit from a Kentucky bank. Even in 1986, when the horse-racing industry went into a steep economic slump, due in large part to the collapse of the oil market and the restructuring of tax laws that eliminated one of the tax breaks for the purchase of horses, Lundy kept spending. He received an extra $10 million from the Kentucky bank that already had loaned him $15 million. And in 1988, just as the Thoroughbred market was really souring, Lundy got another bank loan for a staggering $50 million. It came from the flagship bank of Houston's First City Bancorporation, one of the state's largest bank holding companies, with more than sixty banks and $12 billion in assets.

Kentucky horse breeders who were scrambling to stay afloat were baffled. How did Lundy get a loan from a bank in Texas, where no one knew anything about horse racing? What bank officer did he find to approve that deal?

Actually, it was no ordinary bank officer. The banker behind the Calumet loan was none other than the powerful vice chairman of First City, a big, burly, cannonball of a man named Frank C. Cihak.

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